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Idaho A.G.’s Supreme Court appeal could obstruct University of Phoenix purchase

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Idaho A.G.’s Supreme Court appeal could obstruct University of Phoenix purchase

Feb 20, 2024 | 6:11 pm ET
By Kevin Richert
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Idaho A.G.’s Supreme Court appeal could obstruct University of Phoenix purchase
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Raúl Labrador, who won his race for Idaho attorney general, talks with attendees at the Idaho GOP election night watch party at the Grove Hotel in Boise, Idaho, on Nov. 8, 2022. (Otto Kitsinger for Idaho Capital Sun)

Originally posted on IdahoEdNews.org on February 20, 2024

(UPDATED, 5:18 p.m., with State Board’s motion for nearly $275,000 in fees and costs.)

A University of Phoenix-related lawsuit appears to be headed to the Idaho Supreme Court.

Attorney General Raúl Labrador filed notice Friday, appealing an open meetings lawsuit against the State Board of Education.

The appeal continues a long-simmering legal battle between Labrador and State Board, one long on politics and plot twists. An appeal could pose another time-consuming obstacle to the University of Idaho’s controversial $685 million plan to acquire Phoenix.

And in a separate but related development, Labrador and the State Board are also fighting over $265,000 in legal fees — which will come from one of the two state agencies, and will ultimately be borne by taxpayers.

At issue, still, is a series of closed-door State Board discussions of the Phoenix purchase.

The State Board held three closed executive sessions to discuss the purchase, before endorsing the U of I’s plans in a May 18 meeting. The State Board said the closed meetings fell under a little-used exemption in open meetings law — covering preliminary discussions of a purchase pitting an Idaho agency against out-of-state public bidders.

Ada County District Judge Jason Scott sided with the State Board on Jan. 30, saying the closed-door discussions were legal. In his notice of appeal, Labrador lodges several complaints with Scott’s ruling:

  • Scott decided the law’s exemption covered “all negotiations,” not just preliminary talks. Labrador argued that the exemption should be applied as narrowly as possible.
  • Scott erroneously sided with the State Board on another key matter: competition. Scott said the State Board “reasonably believed” the U of I was in competition with other public bidders. Labrador’s team has long questioned whether other suitors were in the running for Phoenix — especially after University of Arkansas publicly rejected a purchase in April.
  • Scott denied Labrador’s team a jury trial, instead ruling on his own.

What happens next — in court and with the sale?

The possible appeal comes nearly eight months after Labrador filed his initial lawsuit. From here, the timetable isn’t exactly clear.

However, an appeal could easily extend this legal battle by several more months — just as the U of I and Phoenix are trying to close the deal. The purchase faces a nonbinding May 31 deadline; either side could opt out if a deal isn’t wrapped up by that date.

Labrador’s office and the State Board’s attorneys will have more than two months to file a series of briefs and responses with the Supreme Court. Meanwhile, the court will pull together filings from the District Court case, a process that also is likely to take several weeks.

The Supreme Court could hear the case itself, or refer it to the Idaho Court of Appeals. Either way, the Supreme Court is required to act on a request for appeal, said Nate Poppino, the state’s court communications manager.

The appeal isn’t the only hurdle facing the U of I and Phoenix.

Legislators are looking to put the brakes on the Phoenix purchase. A resolution introduced last week calls on the State Board to reconsider its May 18 decision, and threatens a possible lawsuit.

Meanwhile, a U of I-aligned nonprofit will need to go into the bond market to finance the purchase.

The fight over legal fees

Through a spokesman, the State Board declined to comment on the possible appeal. Instead, the board referred to a Feb. 13 motion from its hired lawyer.

Boise attorney Trudy Hanson Fouser argued that the State Board is entitled to nearly $275,000 from Labrador’s office. Attorneys’ fees — totaling $265,237.50 — account for nearly all of this claim.

Fouser says the State Board is entitled to payment because it prevailed in district court. She also criticizes Labrador for spearheading a “burdensome … and unreasonable” legal strategy. All told, the attorney general’s office deposed 16 witnesses — including all eight State Board members; U of I President C. Scott Green; and Jenifer Marcus, the deputy attorney general assigned to the State Board office.

“The decision to engage in such voluminous discovery — and to cause such significant attorney fees to be expended — was the attorney general’s alone,” Fouser wrote.

The State Board hired Fouser as an independent attorney after Labrador took the unusual step of suing the state agency. Since June, the State Board and Labrador’s office have squabbled over who should pay Fouser’s legal bills.

More reading: Click here for our in-depth coverage of the University of Phoenix proposal.